Starting a new business is one of the most exciting times in the life of an entrepreneur. However, the excitement can easily wane of if many things begin to go wrong one after another. There is no doubt that we all have made mistakes and will continue to do so throughout our lives no matter how careful you are. The problem, however, is when those mistakes become routine or are completely avoidable. Every entrepreneur should take the time to conduct a research prior to starting a business and one of the researches should be to learn from the mistakes of others. My goal is to share six of the common mistakes that an entrepreneur can and should avoid before diving in.
1. Failure to have a thorough understanding of how your business will make money
Do you have a thorough understanding of how your business will make money? Just before you say “yes”, let me say this, making money in your business is not just about making sales, it’s about being in good standing in terms of cash.
You might be making sales and still not make money or have enough cash flow. If your recurring expenses are way higher than your sales, your business will never be in good standing.
So now, let me ask the question again. Do you have a thorough understanding of how your business will make money?
[Read: The Period of Waiting is not the time of Lamentation]
Earlier this year, I was reviewing the business financial statement of a client who needed help with her business. She couldn’t figure why she was making so much in sales but could barely make ends meet. At first, she thought she was mixing business funds and personal funds together, so she started separating funds. After separating funds, the problem still persisted and that’s when she sought help.
Not having a thorough understanding of how your business will make money is one mistake you should definitely avoid by paying attention to your pricing mechanism and expenses.
When pricing your products (goods/services), you must put your fixed and recurring expenses into consideration.
2. Failure to sell what the customer wants
No matter how grand your business idea might be or how passionate you are about your business, if no one is interested in your products (goods/services), your dreams of building a profitable brand will be shattered. The only way you can build a profitable brand is when you have the right mix of products and people who are willing to pay you.
A brand with no customer is a time bomb waiting to explode.
In order to prevent this mistake, you must do three things. First, is validate your business idea before you launch. If peradventure you launched your brand already, you should conduct a market research and survey your target audience. Lastly, if you’ve been in business for a long time, always ask your customers for a feedback on how you may better serve their needs. This will help you to know what to avoid while also helping you identifying potential opportunities for growth.
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3. Failure to consider the competition
Truly, the sky is big enough for everyone to fly without touching wings but that does not mean you should be oblivious of your competition. Even if your business idea is grand and no one has ever thought about it, sooner or later, more people will start that same business and vie for the same customers you are depending on. Therefore, you cannot build a profitable brand online while completely ignoring your competition. Prior to launching your brand, you must list the top 3 competitors in your industry and analyze their strengths and weaknesses.
You must understand how you will differentiate yourself from your competitors and list compelling reasons why you believe customers should choose you over your competitors.
Failure to consider competition is a leading cause of failure in business and this is one mistake you want to avoid as much as it lies in your power.
4. Too much reliance on do-it-yourself
Almost every entrepreneur I have come across thinks they can do it all by themselves. While this is a good quality to have, it might not work in all situations and end up being costly.
Nobody can be good in everything or in every area. You might be really good in some aspects of business but in the other areas of your business where you might be struggling, learn to seek professional help.
For example, I am not so good with the accounting and tax part of my business, so I occasionally hire a professional for a few hundred bucks, who can help put things in order on my behalf. I free up my time by delegating some of the tasks to some other people who are willing to help. Time is so precious and you cannot afford to spend hours doing what someone else can do in a fraction of the time you would spend doing the same task.
[Read: 4 Steps to Becoming a Brand in Demand]
5. Failure to possess the required experience needed
We all know that you do not have to be great to get started but you do have to get started to be great. However, for your brand to succeed, you need experience as it relates to the services or goods you are providing to your customers.
Experience comes from doing and doing something repeatedly is the mother of skill.
As a budding entrepreneur who truly wants to build a profitable brand online, you must be committed to building your experience in your area of expertise. If it takes volunteering for other organizations or attending power-packed training, seminars, and events, be committed to giving it all it takes to gain experience. Gaining experience makes you become valuable in the marketplace and in turn, helps you to build a profitable brand online.
6. False Illusion as to the efforts required
The truth is, owning a business requires a lot of hard work. It definitely doesn’t come on a platter of gold. The beginning often involves working long and extra hours. You have to keep up with the trends, especially with technological evolution. You have to learn as much as possible within a very short time.
To achieve groundbreaking success, you should have a strong passion for your business, be hard-working and learn to maintain a positive attitude always. Do not allow yourself to be distracted from your main goal. Just keep taking daily steps that will lead you closer to your goal.
This list of common mistakes is not exhaustive and there is no amount of literature you can read that will stop you from making mistakes in your new business. However, if you keep these points in mind while also learning from your mistakes, you will come out on top and build a profitable brand!!
Thanks for reading. What other common mistakes do you think an entrepreneur should avoid when starting a business? Please leave a comment and share this post with a friend.